It was a slow day in the markets yesterday as there were not many market drivers around and this resulted in low volatility and hence low liquidity. This is something natural in the first day of the week unless there was some special development over the weekend and there were none. We can start expecting some more action from today as the traders wipe off their weekend blues and resume trading.
Directionless Trading in EURUSD
There was not much movement in the EURUSD pair over the last 24 hours as the pair moves on either side of 1.14 without making progress in any specific direction. The dollar has been steady at best and it is a bit of a surprise that the US traders have not been able to take the mantle and run, in a follow up of the action from Friday. The NFP came in pretty strongly and this helped to soothe some of the fears and uncertainty around the US economy and this helped to stabilise the dollar. After not much action during the first half of the day, we had expected the US traders to boost the dollar and help it gain but that has not happened yet.
There still continues to be concerns over the efficiency of the Trump team to push through their policies and with roadblocks at every stage, it increasingly looks as though the next few years might be a difficult time for the US, as far as policy changes are concerned . This should explain the reluctance of the traders and investors in not moving into the dollar just yet, despite a strong employment report. Also, there were reports that said that the ECB may not take up the tapering talk for the next few months but even this report was not enough to bring down the euro.
Looking ahead to the rest of the day, we do not have any major economic news though we have a Fed member speaking later in the day. We expect the action to pick up a bit today after the no-show yesterday though we continue to favor strength in the EURUSD pair.
This article was originally posted on FX Empire